Understanding drivers of performance in the 3PL industry in Hong Kong

Abstract

PurposeThe aim of this paper is to develop an overarching framework to better understand drivers of performance in third‐party logistics (3PL) linked to the operations strategy literature.Design/methodology/approachA path model is specified and estimated based on constructs and relationships grounded in the literature, as well as self‐developed constructs, using empirical data from 159 3PL providers in Hong Kong.FindingsSome dimensions of internal and external environments have positive influences on differing operations emphases. Furthermore, operational performance is positively affected by corresponding operations emphases and functional involvement. Finally, good operational performance can bring about better financial performance. However, strict adherence to the low cost operations emphasis will lead to worse financial performance.Originality/valueThis research provides a novel overarching framework to link competition in the market place, challenges in the operations and functional involvement through operations emphases to operational and financial performance.